I am pretty well convinced the peanut industry has not yet learned the complete lesson of supply and demand.
There are good options for farmers at this time so there is absoutely no need sign a cheap contract for 2012. Why plant peanuts for $1500 per acre when you can make $2200 per acre on corn? That may well be the question for 2012.
Of recent, shelled goods have traded at $1.20 and yet all the farmer is being offered is $1000. It has always been a rule of thumb that the farmer should get about $100 for every ten cents of shelled good price. USDA's posted price would have normally been pretty accurate but the farmer is not receiving what has long been an industry norm.
It might be that for 2012 farmers should consider cutting acres ten percent and not contracting and they might find their bottom line in better shape because of it.
Sadly, just as the rest of the industry has not totally learned the lesson many farmers will sign contracts which are far too low. I guess we all need a primer on supply and demand.
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